U.S. grains: Soybeans turn lower on trade tensions

Chicago | Reuters — U.S. soybean futures ended lower on Thursday on worries about global trade tensions threatening exports, analysts said, while wheat and corn firmed on bargain-buying and ideas of tightening global supplies.

Chicago Board of Trade July soybeans settled down 4-1/2 cents at $10.18-1/2 per bushel (all figures US$). July wheat ended up 4-1/4 cents at $5.26-1/4 a bushel and July corn rose 1/2 cent to $3.94.

Soybean futures turned lower after the United States said it would impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union, reigniting fears of a global trade war.

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The move came days ahead of a visit by U.S. Commerce Secretary Wilbur Ross to China, the world’s biggest soy importer. Ross is expected to try to get China to agree to firm numbers to buy more U.S. goods during a June 2-4 visit to the Chinese capital.

“It’s the start of these Chinese negotiations that everybody’s worried about. It looks like the tariffs on steel and aluminum on our partners are threatening enough that the market is unsure what will happen in China,” said Dan Basse, president of AgResource Co. in Chicago.

The CBOT July soybean contract at times dipped below its 200-day moving average near $10.17 as traders adjusted positions on the last day of the month. The contract ended the month down 30 cents, or about three per cent.

CBOT July corn posted a monthly decline of 6-3/4 cents or 1.7 per cent, while July wheat ended the month up 15-3/4 cents or 3.1 per cent.

Corn clung to modest gains on Thursday despite the trade tensions with Mexico, a top buyer of U.S. corn. Mexico responded to U.S. steel and aluminum tariffs by imposing wide-ranging “equivalent” measures on farm and industrial products, including pork, apples, grapes and cheese.

Corn found support from bargain buying a day after the July contract hit its lowest level in a month on better-than-expected crop ratings, and uncertainty about U.S. crop weather after an unusually warm May.

“The weather has actually gotten more threatening over the last two or three days,” Basse said, adding that U.S. corn and soy crops “look good today, but that is not a barometer of where they will finish.”

Wheat firmed, with the CBOT July contract rebounding from a one-week low of $5.15-1/4 a bushel on technical buying and worries about dryness in the Black Sea region, including Russia and Ukraine.

Russia is expected to reduce its 2018 crop of winter wheat and rye by around 10 per cent from a year ago due to dry weather, a state weather forecaster said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.

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